A Scarbro Construction tower crane at a housing project in Northcote. Photo / supplied
A Scarbro Construction tower crane at a housing project in Northcote. Photo / supplied
Five big Auckland building sites being worked on by the largest construction firm to fail this year are being transferred back to clients in what a liquidator says is a constructive process.
Andrew Grenfell of McGrathNicol said sites at Matakana, Northcote, Glenfield, Mt Wellington and Grey Lynn were being transferredout of the control of Scarbro Construction Holdings, Scarbro Build and Scarbro Construction.
“We’re working constructively with the customers to transfer possession of the sites,” he said today.
More information about the failure will be issued on Monday, explaining the fate of around 60 staff and those sites they were all at, building dozens of apartments.
The three companies were placed into liquidation on April 6, seeing staff leave the retail and housing sites including two for state housing provider Kāinga Ora.
Grenfell and colleague Conor McElhinney are liquidating the companies founded in 1996 and headquartered at Ellerslie.
2. Apartments for Kāinga Ora, Cadness St, Northcote;
3. Fifteen luxury new Balinese-style villas, Matakana Rd, Matakana;
4. Retail construction in Mt Wellington;
5. Apartments in Great North Rd, Grey Lynn.
Customers had not paid the latest amounts that Scarbro had been due to receive due to the timing of the liquidation, he explained.
So not all receivables have flowed in for the latest work just before insolvency was declared.
Contractors complete works, then issue progress claims for the jobs done for that period of time. Quantity surveyors and engineers assess that work and approve it, sending a claims schedule back to the builder saying what’s been approved for payment.
The liquidators were appointed just after the March month-end, around the time just after initial payment claims had been issued to the customers.
“Therefore the certification process is ongoing,” Grenfell said today, although he stressed there were constructive communications between the liquidators and their staff and those clients due to pay the builder for the latest work completed.
Scarbro Construction was building this state house project on Cadness St, Northcote when it failed. Photo / Supplied
Nothing unusual was occurring, he emphasised.
“As you’d expect there are a number of creditors. I can’t give you a quantum at this moment.
“The claims for March which were issued to the principals have not been paid. Under the Construction Contracts Act, there’s a period of time for claims to be issued and it’s usually by the end of the month. But because of the timing of when we were appointed, invoices have yet to be raised not all that has been paid.”
That was not unusual in the building business and was standard practice, he said.
Scarbro Construction Holdings of Ellerslie is 56 per cent owned by Garry and Rhonda Scarborough, 34 per cent by Alison and Peter Davis, 4.55 per cent by Piers Hiron Hollis and 4.55 per cent by Andrew David Moore.
Its website says it completed an $80m job at Ormiston Town Centre for Todd Properties in March 2021.
Scarbro's social media page featured this new North Shore block last month. Photo / Supplied
The business did a substantial amount of hotel, commercial, industrial, office, retail and residential work.
It won $39 million in Government contracts to build 89 apartments at two Auckland sites but all work on that Crown land has been frozen after liquidators were appointed by Garry Scarborough.
That leaves the Government jobs in limbo until new contractors can take over the work.
The biggest was on Cadness Rd, Northcote, where Scarbro won a $28m contract for the 55-unit N30. Work had started a year ago and is only months away from finishing, but Kāinga Ora must now find new contractors.
The project will have four buildings with a total combined area of 6700sq m comprising a mix of apartment sizes and styles over 55 apartment units and associated community rooms and facilities, the business said in 2021.
It is part of the large Kāinga Ora Northcote redevelopment programme and was expected to take 20 months to build.
Scarbro also had an $11m contract to build 34 one- and two-bedroom units in a five-level concrete block on Kaipatiki Rd, Glenfield, for the state agency. It estimated that would take it 16 months.
That project is less advanced but the site is also idle until new contractors are appointed.
Scarbro said it had previously built state housing on Cracroft St, Onehunga, and Penrose Rd.
Patrick Dougherty, Kāinga Ora construction and innovation manager, said last week the liquidation was a “sad outcome”.
“We are in the very early stage of assessing the status of each project and will work with the liquidators on the way forward.”
Precisely who will find to now finish those two big jobs and the other three remains unknown but contractors said they were assessing the possibility of looking at tendering for the work.
Scarbro Construction Holdings got $390,000 Covid cash initially for 56 employees then $151,000 for 43, according to Work and Income.
The failure comes at a particularly busy time with high-rise long term fixed and crawler cranes at an all-time high.
The RLB Crane Index showed New Zealand had 144 cranes up by late 2021, which rose to a record 150 cranes in the six months to the end of February, 2022.
That dropped to 148 cranes in the six months to last August but has now shot to the record 157 by March.
Auckland has 103 cranes, Hamilton and Tauranga have five each, Wellington has nine, Christchurch and Queenstown each have 15 and Dunedin has six.
Chris Haines, an Auckland-based director of quantity surveyors Rider Levett Bucknall, said the crane count showed significant building activity.
